Taxation for selling a under-construction flat

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  1. PRASHANT SINGH

    PRASHANT SINGH New Member

    I have a flat in Gurgaon for last 3.5 yrs still under-construction, I might get possession notice in 1-2 months. Then once I take possesion I will have to register as well.

    But instead of keeping it I am planning to sell it off before taking possession And invest the entire sell value into my new property.

    So wanted to understand if the gain from the above property will fall under long term capital gain and since I am reinvesting, so no tax.

    I have sold one property 2 months back and the amount i received invested in new property and the sell value of this Gurgaon property will also be invested in same property purchase that is the sale value of both my flats will be invested in 1 single property purchase.

    If we consider that property is not registered yet then will this mean that entire gain will fall in normal tax bracket i.e. short term gain. And I can't save on the tax.
     
  2. rudrabose

    rudrabose Active Member

    1. The period of holding would be considered from the date of agreement which was 3.5 years back and therefore this would be classified as a Long Term Capital Gain.

    2. If the old property is sold within 1 year of the date of purchase of new property, you can claim the Capital Gains Exemption.

    3. Registration is not important. You would have entered into an agreement with the builder for purchase of the building. The date of agreement would be considered and not the date of Registration.
     
    PRASHANT SINGH likes this.
  3. PRASHANT SINGH

    PRASHANT SINGH New Member

    Thanks Rudra,
    Would like to share that I have sold one property 2 months back and invested the amount received in new property and the sell value of this Gurgaon property will also be invested in same property purchase that is the sale value of both my flats will be invested in 1 single property purchase.
    So I will be eligible for exemption or not?
     
  4. rudrabose

    rudrabose Active Member

    If you sell 1 property and buy 2 properties - you are not allowed to claim an Exemption

    But if you sell 2 properties and buy 1 property - you are allowed to claim Exemption
     
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